FT: Greece’s Return to Markets is Like Giving Ouzo to an Alcoholic



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The Financial Times published an article today, January 16, written by Ralph Atkins and entitled “Greece must resist return to capital markets.” The articles analyses all the possible scenarios in case Greece decides to enter the international capital markets too soon.

Ireland, which has already managed to exit the support program in December and Portugal that plans to do the same in June, have offered some long-term bonds to the capital markets, attracting a lot of international attention. The yields of these bonds have almost returned to their pre-crisis standards, giving Greece hope that maybe it will be able to do the same.

According to the article, an “early return to international capital markets could confirm a turn-round in Eurozone fortunes; it is less than two years since Greece defaulted. But investors should beware of any early gifts from Greece. Athens’ return to borrowing from international investors could instead prove a harbinger of fresh troubles for other Eurozone countries as well as Greece.”

It continues: “Proof that it could again raise funds independently would allow Prime Minister Antonis Samaras, to become even more assertive in resisting austerity measures. It would provide financial flexibility, providing scope to counter the worst social effects of austerity. Greek banks’ balance sheets, already substantially reworked under the bailout, would strengthen further.”

Many believe that Greece’s return to capital markets would be like giving ouzo to an alcoholic. There is a high risk of failure in the first auction of government securities, which could result in hurting the trust towards other Eurozone markets.

The article concludes “Instead, Athens needs to tread carefully. To edge its borrowing costs lower, Greece needs to regain the confidence of a broad range of conservative European investment funds.”


17 COMMENTS

  1. “Proof that it could again raise funds independently”
    What proof?Which investor in their right mind would touch a bond from a country that has Defaulted, is pushing for a second Default and it is currently 440 billion in debt?The answer is-nobody ,and the Greek political class knows that perfectly.The lie pedaled by the Greek government that Greece can return for financing to the markets is just another Greek scam designed to yield pressure on the Greece’s creditors into giving Greece cheap loans with no austerity measures attached.This lie is more for domestic consumption more than anybody outside of Greece taking it seriously,just like the “surplus” scam.

  2. With Greek Prime Minister Antonis Samaras settling into his role as EU President, UKIP’s Nigel Farage stunned the “Goldman Sachs puppet” with a 150-second tirade of truthiness he has likely never experienced. Farage sacrastically remarks how Greeks “will be dancing in the streets” at Samaras’ ‘successful’ negotiation on MiFiD reminding him that “60% of youth are unemployed and the neo-nazi party are on the march.” Europe is now run by “big business, big banks, and big bureaucrats,” Farage goes on, suggesting the smarmy-looking Samaras should “rename his party from New Democracy to No Democracy.” People do not want a United State of Europe, the outspoken UKIP leader explains, they want a “Europe of sovereign states,” and concludes ominously, “the European elections will be a watershed.”

    “…And you come here Mr Samaras and you tell us that you represent the sovereign will of the Greek people? Well, I’m sorry, but you’re not in charge of Greece, and I suggest you rename and rebrand your party – it’s called ‘New Democracy’, I suggest you call it ‘No Democracy’.

    Because Greece is now under foreign control. You can’t make any decisions, you’ve been bailed out, and you’ve surrendered democracy, the thing your country invented in the first place.

    And you can’t admit that joining the euro was a mistake – of course Mr Papandreou did that didn’t he, he even said there should be a referendum in Greece and within 48 hours, the unholy trinity (troika) that now run this European Union had him removed and replaced by a ex-Goldman Sachs employee puppet.

    We are run now by big business, big banks and in the shape of Mr Barroso, big bureaucrats…”

    https://www.youtube.com/watch?v=l93yjako2j8

  3. January 9th FT reports “Greece will soon return to Markets” and now we are alcoholics. Greeks may enjoy a sip of their Ouzo, but it appears the FT’s reporters in Athens must hitting the Tsipouro awfully hard lately.

  4. I don’t see how the current precarious situation Greece find itself in is Samarases fault.The Greeks collectively should have thought twice BEFORE pawning their children’s and their grandchildren’s and before selling their votes to a corrupt clientelist political system in return for favors and unaffordable lifestyle during the last 25 years. Everybody profited from this Status Quo, yet enjoyed their generous state handouts silently,including “revolutionaries” like you that are now crying loudest that there is no democracy in Greece. And yes,the Democracy ends when you run out of other peoples money to spend,I am afraid.

  5. it’s everyone’s fault from the generation you mentioned to Samaras and his treasonous coalition who are partly at fault because they had the opportunity to start from scratch and hit bottom quickly instead of this slow motion train wreck fiasco just so that the banks and oligarchs can keep their euro while getting bailed out.

    i didn’t realize that you knew me so well to assume that I just started complaining now and that I receive some sort of generous handout, which I don’t. I, unlike most of Greeks esp the oligarch class who are responsible for the fact that 80% of the taxes that should have been collected over the years were not (it’s not just a spending problem), had paid my taxes and have never held a government job, per your assumptions. I also have been against the Euro and this protected political class since inception. My “complaining” has been going on for years. so take your assumptions and defense of the other side of this dance, the foreign masters whom Samaras has ceded autonomy to just so his friends and masters can firewall themselves from the eventual devaluation, and leave us true Greeks alone. by the way which bank do you “work” for or what is your financial interest in all of this? are you long EURUSD and long insolvent northern european banks?

    Democracy ends when you decide to bailout your foreign masters indirectly using your own country as the pass through conduit vehicle so that said foreign masters avoid the stigma of receiving a direct bailout.

    Greece has all the leverage here. you will see one day.

  6. At the last elections the Greeks CHOSE the euro and the bailouts,nobody forced them to do so.

  7. ND/PASOK got 40% of the vote, meaning 60% voted against the Euro. try again. They have a majority because of the +50 seats the first place party gets.

    it is blatantly obvious you’ve never been to Greece and certainly not recently. head on over to mykonos, glyfada, etc and you tell me if the free money is still pouring in. New restaurants, clubs and glitz galore. Like I said the protected oligarch class (mainly ND/PASOK) with offshore bank accounts and who knows what other financial interests, that were firewalled along with the rest of northern europe courtesy of their buddy Samaras.

    Ironically, drachma is still the only solution.

  8. Drachma is the apparent solution for one reason.Greece can not print euro and it needs a lot of euros for a properly functioning economy as well as to fund its liabilities/depleted pension funds so it is the only solution,really.

  9. No drachma….it won’t happen.
    Another false prediction by Tedi Am-Turd.
    Again I will hold you to it.

  10. When Greece returns to the markets I will be here to remind you Tedi Am-Turf. But by then you may have changed your screen name to save your blushes.

  11. Of course what you say in common sense. Orwell – “In a time of universal deceit – telling the truth is a revolutionary act.”

  12. Polycrates. The whole article is about the Greek government. None of it is talking about the Greek people. None. The Greek government is the subject of the article, the Greek government is the alcoholic.

  13. Tedi, were the Greek voters running the government finances? Do the “economists” at the finance ministry change with the government? Is the shareholder in a position to judge what amount of benefits and wages should be given to each front line worker? If Greeks are guilty of anything it is being uneducated in economics but this is hardly a Greek phenomenon.

  14. When Greece returns to the markets I will remind you of Tedi’s so called facts limit_ed!!!